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chair hill: the committee on financial services will come to order. this hearing is titled "the annual testimony of the secretary of the treasure on the state of the international financial system." without objection all members will have five legislative days in which to submit extraneous materials to the chair for inclusion in the record. i now recognize myself for an opening statement. i want to welcome treasury secretary bessent to his first appearance before our committee. the president is fortunate to have a cabinet official of this fine caliber. this annual hearing is meant to examine the international financial system. the international monetary fund, the world bank, and regional development banks play a key role in advancing u.s. interests, but in recent years they have surrendered to mission creep. under the biden administration, the imf's management tried to turn the fund into world bank

lite, launching initiatives on climate change and social policy. if the trump administration wants to pull back the imf's mission creep, it can start by describing the sustainability facility and instead focus on poverty reduction and growth trust. other reforms are just as vital. in 2021 imf management pushed through allocation of special drawing rights, sdr's, that gave china over $40 billion in unconditional liquidity with another $17 billion going to russia and 5 million dollars each going to iran and venezuela. congress had no say in the matter. any future sdr allocations must have elected lawmakers' buy-in. we need to leadership of the imf that cares more about the fund's core mission rather than hurting the feelings of the chinese communist party. think about it, no one can say

what the true growth rate is of the world's second-largest economy. no one really understands how china manages its exchange rate. it nearly has a trillion dollars trade surplus at a central bank controlled by the rotarian -- by an authoritarian, dictatorial political party. it's predatory lending to developing countries has seen no significant restructure. all of this is an indictment of the imf's leadership, and we need greater transparency. turning from the imf, world bank and asian development bank is still greenlight a billion dollars per year for chinese projects. i urge the trump administration to end all world bank and asian development bank assistance to china. at the same time, i commend the world bank for its recent openness to financing nuclear energy, which is a priority of mine and enjoys bipartisan support in congress. during the spring meetings last

month, i met with officials from around the world who agree that nuclear power is an obvious fit for the development bank's core mission. i was pleased to see you, mr. secretary, echo support for nuclear energy as well. if we care about back to basics approach, the banks can go even further by recommitting themselves to public health, education, and infrastructure. for example, 70% of 10-year-olds in low- and middle income countries cannot understand a simple written text. over 400,000 children die of malaria each year. half of sub-saharan africa has no reliable electricity. but for too long the world bank and others have spent more time and more money on climate change and empty rhetoric than trying to tackle these urgent development challenges. mr. secretary, our committee appreciated your remarks at the imf world bank spring meetings

when you're outlined an active approach to these issues and noted the critical leadership bold that the united states plays in our multilateral financial institutions. we should be pleased that treasury has a leader who has signaled that he will tackle these issues in a serious way. i look forward to discussing our international financial institutions with you, as well as hearing from our members on the various priorities. i yield back. the chairman recognizes the ranking member of the committee, ms. waters, for opening statement. rep. waters: thank you compressor chairman. since the first day of the trump administration, members of congress and the american public have demanded transparency and accountability regarding the economic calamity this regime has caused. instead we have been met with flat out right lies, deception, and an unfathomable level of gaslighting. secretary bessent, you

are about to go down in history as the man who oversaw one of the most significant economic power falls in history. the u.s. economy had the strongest recovery from the pandemic compared to other large economies in the world, and is now falling behind. in the first quarter since trump took office, the united states economy shrank was to mystic product, decreasing by 0.3%. we are falling behind while canada, europe, and china are racing ahead. what happened to the golden age you and president trump promise to the american people? mr. bessent, you're also the face of what "the wall street journal" called the dumbest trade war in history. this document with the worst 100 days of any -- the stock market

with the first 100 days of any residential term. ceo's are sounding the alarm of what is to come -- and be shelves, higher prices that the american consumer will pay. companies are running out of inventory, port volume is down, and small businesses are wanting they will not survive this. inflation remains a problem, housing affordability continues to be challenged, with homebuilders estimating trump's tariffs will add $11,000 to each new home they built. i have no doubt that what i'm telling you, i'm telling you stuff you already know. it has already been reported that you admitted in an april 22 closed-door investor summit that trump's tariffs on china are "unsustainable." but in public you have twisted yourself into a pretzel to justify them. you are gaslighting the american

people into believing that this chaos is all part of some master plan. if the plan is to steer the u.s. economy into a recession, as economists have predicted, then it's working. economists say trump tariffs will cost on average each american family $5,000 more per year. mr. bessent, because you and your ultra-wealthy group of insiders can avoid this, most americans cannot. the american people also deserve to know why you handed elon musk and his doge minions access to treasury's payment system and the consumer financial protection bureau's database. you need to tell the american people why you are dismantling agencies that protect consumers from financial fraud and abuse and weakening ones meant to support the small businesses struggling under the weight of

your policies. you need to answer for this, and you need to answer for why senior members of this administration are trying to make a buck off of this market manipulation and blatant, brazen corruption. chairman hill, if i were you, i would swear this one is in begins his testimony. chair hill: the gentlewoman yields back. [laughter] the chairman recognizes warren davidson for an opening seven. -- opening statement. rep. davidson: as the committee gathers to discuss the international financial system, your remarks at the imf meetings in the bullseye. your mission to steer the imf and world bank back to their core missions, macroeconomic stability and economic a moment, while cutting through mission is exactly what we need.

by championing physical discipline -- fiscal discipline and private sector-led growth, you are paving the way for a sustainable economy. america is done dangling china's trade scams. trying out dollars to harder firms of these international institutions is accountability that we cannot should trust. america first must mean that america's resources advance america's interests. thank you for your clarity in your tireless efforts, mr. secretary. let's make sure that the global financial system serves main street americans, not globalist elites. i yield back. chair hill: the chairman recognizes ms. beatty for one minute. rep. beatty: first let me start by associating myself with the words of ranking member waters. mr. secretary, hard-working american families have been struggling, as i'm sure you

should note, since the pandemic to put food on tables and keep small businesses open. just when the biden administration had started to provide some relief, the trump came in and needlessly --trump administration needlessly came in a tank the economy. we are seeing the direct opposite. i lay the blame on the trump administration. inflation is up, borrowing and housing costs are rising, the stock market is in chaos, endangering americans' retirement savings, and the united states economy shrank in the first quarter since trump took office. just to add insult to injury, republicans are cutting medicaid and food stamps to pay for huge tax cuts to billionaires. our constituents deserve better. i yield back. chair hill: today we welcome the testimony of the honorable scott bessent, secretary of the treasury. we thank you for taking time to

be with us. you will be recognized for five minutes to give an oral presentation of your testimony. without objection, your written statement will be made part of the record. mr. secretary, you are mechanize for five minutes. sec. bessent: chairman hill, ranking number waters, members of the committee, i'm grateful to join you today. at the imf and world bank spring meetings last month, i relayed an important message -- america first does not mean america alone. to the contrary, america first seeks to expand u.s. leadership in international institutions like the imf and the world bank. by embracing a stronger leadership role, the united states will for fairness to the international economic system. i look forward to answering your questions on this topic today. i look forward to providing you with a broad overview of treasury's achievements and future plans. specifically i would like to highlight the department's efforts to boost u.s. economic growth, improve government efficiency, and target illicit

actors that threaten our national security. the core components of the trump economic agenda are trade, tax cuts, and dealer galatians -- de regulations. they are interlocking parts of an engine designed to be economic growth and domestic manufacturing. tax cuts and cost savings from deregulation raise real income for families and businesses. tariffs create an incentive for reassuring jobs and fair trade. and deregulation complements terrace by making it easier to invest in manufacturing project. already this agenda is bearing fruit. in the first 100 days of the new administration, 464,000 new jobs were added to the economy. in april alone, 177,000 american jobs were added, more than 40,000 more than economists predicted. all the while, employment

remains low while real hourly wages continue to grow. as important as exploring job growth is wrangling inflation. in this endeavor the administration continues to make tangible progress. the cpi for energy goods declined in march, as did the price index for corporate. the cpi for best core goods. the cpi for all -- as did the price index for court goods. while the cost of goods is decreasing, solar energy prices. complementary to our efforts to grow prosperity, we are focused on improving efficiency across all levels of government, especially the irs. we just concluded a successful tax filing season, but the irs still needs significant reforms to deliver efficient and cost-friendly results for the american people. in this endeavor, we have successfully cut $2 billion from the irs i.t. budget without any

operational disruptions. he achieved these cost savings by eliminating, reading negotiating deck renegotiating, --renegotiating, and descoping wasteful i.t., and addressed long-standing inefficiencies such as auto renewed licenses unused for years. this intervention alone will save taxpayers hundreds of millions of dollars each year. we are taking steps at the irs to reduce administrative costs with a particular focus on paper processing, which has been a long-standing bipartisan goal. last year the irs spent approximately $450 million on paper processing, with nearly 6500 full-time staff dedicated to the task. through automation, treasury aims to reduce the expense $220 million by the end of president trump's second term.

in addition to making government more efficient, treasury is committed to working alongside the white house to making america safe again. to that end, we have launched a maximum pressure campaign against violent cartels and terrorist networks. we have access to tens of millions of dollars in civil penalties -- assessed tens of millions of dollars of civil penalties in organizations money laundering on the border and choking off the financial lifelines of criminals, terrorists, and hackers from mexico and guatemala to china and iran. in the first 100 days of the new administration, we have set the table for a robust economy that allows main street to grow. with congress and the white house working hand-in-hand, we expect to see even more positive results over the next few months. key to expanding economic opportunity for all americans is making the trump tax cuts permanent. we are eager to work closely with members of this committee to pass this bill into law.

together we can build a stronger, safer, and more prosperous america. thank you. chair hill: thank you, mr. secretary. we will turn to member questions the chair recognizes himself for five minutes for questions. mr. secretary, as i noted in my opening statement, i was pleased to see your endorsement of nuclear energy project during the world bank spring meetings last month. on a bipartisan basis, this committee recently passed my international nuclear energy financing act, which would establish trust funds at the world bank, european bank for reconstruction of element, and potentially other debt reconstruction and development, and potentially -- reconstruction development. would you support the idea of trust funds to benefit nuclear energy financing at the multilateral developing bank? sec. bessent: mr. chairman, this

administration supports an across-the-board effort to increase the nuclear power for civilian use throughout the world, and we think that the world bank should make that a key effort. chair hill: thank you. also referenced my work over the past five years with the treasury and others about imf reforms. you also referenced that in your talk. recently the imf shareholders agreed to a quota increase. i appreciate the agreement that this agreement does nothing to increase the voting power of china or russia. but were congress to approve this agreement, it would allow future administrations to greenlight more general special drawing rights allocations close to a trillion dollars. that would mean $60 billion of new, unconditional liquidity for the chinese communist party, $25

billion for moscow, $7 billion each for the regimes in caracas and iran. with no sign off from congress. so even if road regime -- rogue regime sdr's are rejected by countries which we have seen in the case of sanctioned countries, they could be exchanged behind the scenes for chinese rnb, for example. we work reform the sd is will you work to reform the --will you work to reform the sdr allocation process the imf? sec. bessent: we believe it should work. support the goals of the united states of the america. and as i said during my speech at imf week, this administration is aligned with you in your goals on the sdr, and furthermore, we believe that the

imf needs to get back to basics in working with countries when there is a market failure in financial markets rather than helping large, well-financed countries. chair hill: thank you. we look forward to following up with you and working through this. it won't be an easy task, but with international leadership from the united states, we can all get there and benefit, and countries in trouble will benefit instead of just the general allocation approach . the president since he has been in office has championed high-profile investment issues involving china. as everyone knows, he has been negotiating u.s. investors' acquisition of control over tiktok. in his state of the union address, president trump announced a major investment with the americans take control of two ports near the panama canal that are owned by hong kong-based business.

i'm concerned that recently established out and out investment restrictions could make deals like this even more challenging. under the regulations, u.s. investors don't know which companies are off-limits, and americans face bureaucratic hurdles if they want to take control of chinese owners. what are your views on revising outbound programs to change this since the president wants strategically to see american investors take control of chinese-owned entities? how do we make sure we get outbound rules right? sec. bessent: mr. chairman, i want to thank you and members of this committee for leadership on this. i had a very good discussion with two members yesterday where we talked about the importance of establishing a either red light or green light and not having a yellow zone for

compound investment. the outbound investments program is an important national security tool in our effort to restrict the p.r.c. from benefits of u.s. investment. we have been receiving notifications from the outbound program. we are monitoring the market. and we are trying to ensure that the investment community is aware and familiar with the program. i appreciate the interest from congress. while legislation will be important and helpful, we would like a bit more time to process including the work mandated by the president to inform legislation. chair hill: i appreciate that. we look forward to working with you. i yield back, and i will turn to the distinguished ranking member of the committee, ms. waters, for five minutes. rep. waters: thank you very much, mr. chairman. secretary bessent, this is the first time we met, is that correct? sec. bessent: no, ma'am, we met

one new year's eve in the bahamas. [laughter] rep. waters: didn't make an impression. sec. bessent: you were much better at the electric slide than i was. i was with the prime minister of the bahamas yesterday, who sends his regards. rep. waters: well, were you with my husband when he was the ambassador to the bahamas? well, you are not going to like this. [laughter] didn't remember that, but that's because you have been at treasury and i've sent you five letters to ask about what was going on under your leadership and only received a couple of chris wray replies from your-- cursory replies from your staff. why didn't you respond? sec. bessent: ma'am? rep. waters: i guess you don't know why you didn't respond. sec. bessent, you work in

finance before, right? you work with this committee on small businesses and institutions that finance them. i worked with trump's first treasury secretary to pass $12 billion in support for community development financial institutions and minority banks and credit unions. so i was surprised when trump first tried to eliminate the cdfi's, but it caught you by surprise also. you said that the cdfi fund plays an important role in expanding financial access. unfortunately you are not very persuasive left week. trump proposed to cut basically all cdfi funding. let's discuss her job before becoming secretary. your hedge fund had a secret sauce for how to make money for investors, a proprietary trading strategy. as ceo you guarded that strategy

and never allowed unrelated person to access data, personnel files, and algorithms, right? i'm sure you would never have allowed anyone unfettered access to change or use those records, right? i suspect not. that makes good sense. what doesn't make good sense is why is treasury secretary and acting cfpb director, you would allow unfettered access -- you would allow doge unfettered access to systems that handle trillions of dollars in payments to entities regulated by the cfpb, or most alarmingly to the tax records of hundreds of millions of americans. you still threw the gates of our finance system open to elon musk and his band of 22-year-olds. yes or no, do you know the level, type, or nature of the

clearances and security training required for individuals to access the information held in the computers of treasury, irs, or cfpb? sec. bessent: yes, i do, and i think we would have a disagreement of the definition of the word "unfettered." rep. waters: mr. secretary, did all the individuals working with doge who were given access to treasury's and cfpb's databases receive all of the required clearances and security training before they were granted access? sec. bessent: again, they were granted read-only access at treasury. rep. waters: so let me just -- sec. bessent: never two --there were two doge employees -- rep. waters: you can't filibuster here, this isn't the filibuster playground. you allow these strangers into our treasury with access to all the data and personnel information and you just opened the door. when you do that --why did you

do that? sec. bessent: no, ma'am, they were treasury employees. rep. waters: are you saying today in front of this committee that all of them were treasury employees, the 25-year-old who has been identified who worked for elon musk was not allowed -- was allowed into the treasury? with that person there? --was that person there? sec. bessent: he was a treasury employee, as well as the senior person on the doge team. there were only two people -- rep. waters: never doge -- there were doge employees also. were you aware that their work doge employees coming into treasury getting all personal information -- sec. bessent: there is no such thing as a doge employee, there are treasury employees. rep. waters: i tend to disagree with you based on the information i have. as any information been downloaded by anyone working with doge working with treasury's or cfpb's computer, yes or no?

sec. bessent: not to my knowledge. rep. waters: you better learn. chair hill: mr. has meant recognize for five minutes. >> it's been ironic that it's been declared a no-filibuster is owned by the same people who walked out of a hearing yesterday in filibuster. to give you one quick, brief moment, are you saying there was no unauthorized or unsanctioned persons that had access to the systems that you are in control of? sec. bessent: again, there were two employees, there are very strict guardrails, and they were there for an erp function. >> so they were authorized unsanctioned? -- and sanctioned? sec. bessent: yes. >> not unknown, and elon musk was not one of those two people? sec. bessent: to my knowledge elon musk has ever been in the

building. >> i want to hit on burma and crypto and if we have time china. i want to thank you for the actions treasury took this monday regarding burma. the national army has become a haven for transnational criminal organizations that run illicit operations such as human trafficking and smuggling the group has strong ties to the burmese army, which is targeted religious and ethnic minorities such as the rohingya since the civil war started in 2021. while the u.s. and our allies imposed sanctions against the military junta, the atrocities continue. my district, the fourth district of michigan, is home to a proximally 5000 of these ethnic burmese. i'm asking you, we need to do more to protect the people of burma and to stop the genocide. yesterday i reintroduced the brave burma act, a bipartisan piece of legislation that would require the president to determine on an annual basis

whether to impose stronger blocking sanctions against the myanmar oil and gas enterprise, the myanmar economic bank, and foreign prisons operating in the fuel sector of the burmese economy, a tremendous amount of their revenue, and further limits the junta's ability to borrower the imf, one of the issues that -- borrow at the imf, when it the issue the chairman was focusing on. can i get your commitment you will continue to work with my staff and us on a bipartisan basis as we address these issues? sec. bessent: congressman, we are happy to work with your staff on this legislation, and thank you for your leadership on this issue. i share your concern about imposing consequences on persons who threaten the peace and security and stability of burma. treasury has tools to continue to take action for the people of burma. and working with you we will continue to do so.

rep. huizenga: that's great, and what is frustrating is that while some of these sanctions have been put in place, a sanction is only as good as the willingness to enforce it. we have seen them receiving financial support, the junta, from around the world, especially, frankly, as there ramped up production during the last administration. it is not just burma, it is places like iran that this illicit activity that has gone around the sanctions has been allowed. in some cases treasuries granted these licenses. i sit on the foreign affairs committee as well, and we see this all the time. i want to touch on crypto. yesterday, as i mentioned, the committee held a hearing with house agriculture, or attempted a hearing with house agriculture committee. turned into a very important roundtable as well regarding digital asset market structure reform. can you quickly explain how important it is to -- for

america to take the lead here, especially as we see china leaping ahead? sec. bessent: yes, sir. we believe that the united states should be the premier destination for digital assets, and as members of this committee and the senate are attending to do, create good market structure around that so that u.s. best practices are used around the world -- rep. huizenga: and that's really the point, having american, u.s. best practices to set the pace for others to follow, rather than as trying to fill in the holes that others -- that may be created as others said that pace. sec. bessent: yes, sir.and also , the digital assets are an important source of innovation that will drive -- that can drive usage of the u.s. dollar

around the world, as with stablecoin legislation. there is speculation that there may be up to $2 trillion of demand over the next few years for u.s. government securities from digital assets. rep. huizenga: my time has expired, but i will send you my question regarding chinese debt trap diplomacy. i yield back. chair hill: the gentleman from new york, ms. velasquez, his big night five minutes. >> i want to raise a point of order. but i do not want -- i would like for the witness to be swearing in before i ask my questions. chair hill: chair doesn't see a need for that, you may ask your question. struck the gentlewoman's time over with, five-minute start -- start the gentlewoman's time over with, five minutes. rep. velasquez: secretary

bessent, you were on cnbc earlier this week making claims saying we are very close, and maybe we will see some deals this week on tariffs. tell us, tell the american people, small businesses and consumers, retirees, specifically which countries you are close to striking deals with. sec. bessent: i'm sorry, congresswoman, but that would not benefit the united states -- rep. velasquez: no no no, i'm asking you a question based on the statement you made on cnbc. sec. bessent: and i am telling you that it would be detrimental to the interest of the united states for me to answer -- rep. velasquez: why would that be detrimental? sec. bessent: because as the negotiations made still-- may still be in process as we speak, as we are not at the end of the we get, i'm sure you through

your question would not want to compromise -- rep. velasquez: reclaiming my time. sec. bessent, the president goes into a press conference and claims that there are negotiations going on, and then the next day there was no negotiations going on. why would you not answer my question and that would be considered detrimental to the american people come into the american economy? i do not understand. sec. bessent: i'm happy to say there are negotiations going on. i'm not going to reveal the details. rep. velasquez: so how long do you think those negotiations will take before they are concluded? sec. bessent: there are numerous countries, as i have said if you saw my cnbc interview which you referenced, that there are 18

important trading partners, and we are moving forward at all deliberate speed with those. rep. velasquez: do you consider these negotiations advanced negotiations? sec. bessent: some of them are quite advanced. rep. velasquez: so you expected this deal to be more than memorandums of understanding? you expect them to be full negotiated trade deals? sec. bessent: i believe that there will be agreements in principle and then we will paper them over in the coming months. but once we reach an agreement that i am sure the other countries will live up to -- rep. velasquez: ok, and congressional testimony yesterday, you said the u.s. has not started negotiating with china on tariff reductions. does that continue to be a position, yes or no? sec. bessent: as you may have read it -- rep. velasquez: yes or no, sir? sec. bessent: as you may have

read in the press, i will be going to switzerland, at the negotiations will begin on saturday. rep. velasquez: ok, so the president told you that that will be your answer today. sec. bessent: the -- rep. velasquez:'s so can you tell who from the trump administration is engaged in those discussions? sec. bessent: which discussions? rep. velasquez: with chinarep. velasquez:. sec. bessent: traded discussions? rep. velasquez: trade discussions, yes, sir. sec. bessent: the trade negotiations will be led by mass of an investor jameson grip -- myself and investor jameson grip greer. rep. velasquez: what about peter navarro? sec. bessent: he will not be joining us in geneva.

rep. velasquez: thank god for that. are those considered advanced? sec. bessent: as i saidsec. bessent:, on saturday we will begin, which is the opposite of advanced. rep. velasquez: secretary bessent, as treasury secretary and senior member of president trump's economic team, has president trump given you the authority to finalize any trade agreement with china or and the other trading partner --any other trading partner? sec. bessent: as president trump as stated, you will have the final decision on any trade agreement. rep. velasquez: so you are telling me all of these increase prices, stock market losses, production delays, are all based on the whims of donald trump? that you could strike the best deal with canada, mexico, or

china completely in our favor -- chair hill: the gentlewoman's time has expired. rep. velasquez: if president trump decides for whatever reason not to take the deal, that will be it. i yield back. chair hill: the gentleman from oklahoma, minister lucas, chairman of the task force on monetary policy, recognized for five minutes. rep. lucas: as the dust continues to settle from last month's volatility, how would you characterize the functioning of the market during that period? the dustup in treasury markets. sec. bessent: the market was very well-functioning. it was volatile, but the underlying infrastructure work quite smoothly, sir. rep. lucas: does the treasury department have the tools to address market volatility? he said he may increase the use of the buyback program. are these -- are there other

authorities that might be helpful to address the challenges? sec. bessent: yes, sir, we have a very large toolkit we can deploy, as does the federal reserve. rep. lucas: taking a step back, mr. secretary, can you provide us with a sense of what regulations the administration is working on to bolster resilience in the treasury market and the timelines when you would expect those changes to be announced? this is a core issue of the task force i and a number of my colleagues were working on. sec. bessent: the option sizes, the current issuance sizes leave us well positioned to address potential changes in borrowing needs. investment participation in options, there has been brought investor support. our weighted average maturity is about 61.2 months, which is quite fulsome. we have implemented a buyback program with two objectives, liquidity support and cash management. rep. lucas: one last question

along that line -- i've long said that the administration should look at reforming regulations such as the supplemental reform ratios to remove some of the constraints markets are facing. i hope you will consider looking at that. sec. bessent: sir, treasury does not look at that, but i believe it is a high priorityf or the three regulators, occ, fdic, and the federal reserve. rep. lucas: thank you. as the sec continues to implement their clearing row, a number of firms including those outside the united states are looking to provide clearing services for u.s. treasuries and their derivatives. how are you working with the sec and the cftc to ensure the integrity of the treasury markets as these firms look to intermediate? sec. bessent: sir, the treasury market is a global market, and we welcome new participants and

we want to make sure that best practices employed in the u.s. are also employed globally. rep. lucas: the reason i ask that is -- if you could specifically comment on the clearing of u.s. sovereign debt outside the united states -- what risk that potentially present? i, at that from the perspective, if there is a challenge in the market, if it is a u.s.-based entity, the regulators who might make the difficult decisions are here. if it is outside of the united states, they might have a different perspective. sec. bessent: we are constantly studying that, sir. as of now we do not believe it presents a risk. as we continue our studies, i will have my staff interact with your team. rep. lucas: absolutely, mr. secretary. one final question -- primary dealerships has become an expensive proposition for firms.

in one explanation for brisbane's leaving the market -- one of the many -- four participants leaving the market, one of the many excellent nations. should we make it friendlier for investors wanting to become private dealers? sec. bessent: sir, we saw at the recent auction very low participation by the primary dealers, which tells me there may be a regulatory function there that is preventing them from using their balance sheet for the benefit of the u.s. treasury. rep. lucas: clearly the task force that chairman hill was kind enough to set up in yourself, we have work to do. thank you, mr. secretary. i would yield to the gentleman from michigan. >> thank you, and i can get my china question in. i want to talk about the international financial institutions such as the imf and world bank. they are falling short of addressing key challenges.

china, whether it is in africa or burma, has engaged in deb t-trap diplomacy. how should the imf really help borrowers take the fund's advice when he keeps giving china a free pass? sec. bessent: well, congressman, as i said in a public interview after one of my imf speeches, it is time for china to graduate from developing country status. it is the second largest economy in the world all stop they are a large, important economy. they should no longer be granted the status of a developing economy. chair hill: i would like to invite you to continue the answer in writing. i think the vice chairman and mr. lucas. let me call on the gentleman from california, ranking member for the capital market

subcommittee, mr. sherman . rep. sherman: since the last figure had an extra 30 seconds, and i have annexed with 30 seconds afternoon-- can i have an extra 30 seconds? chair hill: i would be happy to do that. rep. sherman: i agree that special drawing rights should be increased with congressional input and i agree with a focus on burma and mine market i asked to enter into the record a chart of how the value of the dollar has declined precipitously since trump's so-called liberation day and to put into the record a cbo report issued just an hour ago that shows the republican proposals to change medicaid would in one case take 1.5 million people -- would lose their medicaid benefits, and in another proposal would cost 3.9 million americans medicaid benefits. chair hill: without objection. rep. sherman: i ask unanimous consent to put into the record a

letter i sent to the secretary responded to by his assistant secretary dealing with direct file, which means you don't have to pay turbotax, because the irs has the software. the response that i got, an absurd response, was basically we just want to make sure turbotax makes a lot of money, so we are not going to do that. i would point out that the irs could send every american for their voluntary use of proposed first draft of the tax return since you already have the w-2, you have the 1099, and you don't have all the input errors from people doing their own returns. that is something that your administration is stopping. i would ask you -- chair hill: without objection. rep. sherman: yes. i would ask you, mr. secretary, to provide for the record within one week your best estimate of when the u.s. will hit the debt ceiling and exhaust our borrowing capacity can i count on you to provide that for the record? sec. bessent: sir, the so-called

x date is a moving target -- rep. sherman: i would like your best shot. sec. bessent: as i stated yesterday, we are moving on to the warning track -- rep. sherman: i would ask you to provide the congress the best information you can, but i'm going to go on to another question. i represent one of the two areas devastated by the los angeles fires. i spoke directly and on camera to president trump and asked him to exempt building materials from these tariffs. the national -- national association of homebuilders says that these tariffs will add $11,000 to the cost of these fire victims rebuilding their homes. can you assure us that in a country where we have a devastating housing shortage in general, we have thousands of people in los angeles who have to rebuild their homes in particular, that these fire g to face this additional cost to rebuild their home? sec. bessent: i will look into

that matter. rep. sherman: that is exactly what the president said in january -- sec. bessent: i was in los angeles the week and an toward the deposition -- rep. sherman: thank you, i thought you said the deposition in the palisades and i hope you will not be imposing another cost on the homebuilders. as the capital market, where i devote most of my time, all of us on the subcommittee agree we are trying to get people to invest in american stocks and build the american economy. our tax code has hundreds of billions of dollars of incentives to get people to invest in america. china also has incentives to get the chinese people to invest in chinese stocks. but there's a difference. china only provides those incentives to chinese people if they invest in chinese stocks. american billionaires like investing in china, making

tens and hundreds of millions of dollars in profit. can you think of a reason why the american tax code should provide enormous tax benefits like the capital gains allowance to american billionaires who invest in chinese.? why is that international interest? sec. bessent: sir, it is not available to billionaires -- rep. sherman: right, so why do we want to encourage -- sec. bessent: -- chinese etf -- rep. sherman: why would we be neutral on whether i by an american etf or china etf? going prefer that american capital be invested in america or are we fine to invest abroad? sec. bessent: we don't want to close the capital account and we do on investors to maximize their judgment -- rep. sherman: let me go into one more thing -- sec. bessent: i would not bet against the u.s. -- rep. sherman: please, question. --nextueabu dhabi and united arb

emirates evidence they will give $2 billion to a stablecoin put forward by world liberty financial. this stablecoin pays no interest. you and i are finance people, went to check my math, assuming a 4% rate of return, is this loan of $2 billion worth $80 million every year to world liberty financial and its trump owners? sec. bessent: sir, i haven't seen that, i don't know the expense ratio, and as far as i know, no stablecoins pay interest. rep. sherman: so "the new york times" is wrong. please read the article. i yield back. chair hill: the gentleman from texas, mr. sessions, is recognized for five minutes. rep. sessions: secretary, we are delighted you are here. part of the challenge against you this morning and sundays is the explanation of the tariffs

matter that president trump has initiated and sticking by. i would like to provide my input on that if i could. i think that president trump sees the relationship with china by what it really is, and that is an unfair relationship, one which needs to be not only looked at, but really something done about it. i know that while we have pntr, it should mean that we treat them the same way they treat us, but that is not happening. president trump, part of thesea changes come has changed the de minimis rule, the amount of money when package that comes into our country, whether it was looked at or not, whether the tariff was paid upon it -- i believe there were chinese companies taking advantage of that. some 4 million packages a day were coming to the united states, i say were coming

because i do not believe that rate is still occurring. as a result of that, what happened is it contributed to the fentanyl issue we had because we did not look at these packages with the same viewpoint others did. my point in bringing this up is i believe with the new numbers of 177,000 net american jobs being created in the private sector, there is an understanding by people who want to invest in america that this president is finally taking on the chinese, who undermined not just intellectual property, but undermined with their government, the chinese government, undercutting the price and manufacture of many products that were american-made. many of them, or some of them might be power tools, and craftsman is an american made products. it was not uncommon for their

tools beyond the internet, $400, $500, and for a chinese product to be brought in for $40 or $50. that undermined not just our intellectual property, but it undermined the manufacturing that takes place in this country. and i'm delighted that you and the president are engaged in balancing that out. i think that is what this 177,000 new american jobs net provided for us, because it is people who want to invest in the united states, knowing that finally we have a president that will protect that onslaught of chinese goods undercutting american not just jobs and intellectual property, but the events that take place therein. i think this president has done a great job, i want to offer my support for that.

whatever the president has done --part of what the president has done is set a new challenge and mark for americans to pick up that part that was before challenged by china. mr. secretary, measurements $700 million a year in fossil fuel revenue --russia earns $700 million a year in fossil fuel revenue that helps its war in ukraine. most of us would like to see russia held accountable. can you talk to me about sanctions that are or are being considered against russia energy firms as it relates to selling their products to china? sec. bessent: yes, sir, and i will tell you that the biden administration exercised with regards to russia and ukraine support a dichotomy. on one hand, they were giving aid to the government of

ukraine. on the other hand, their sanctions against the russian the sanctions were just against some of the lower-level oil companies. there was a rice gap that has never worked. on his way out the door in a fit of bravery, the national security advisor jake sullivan raised the sanctions because the biden administration had been worried about upsetting the oil price, pushing up oil rises during an election year. the trump administration through our energy abundance and signaling to the energy markets, crude oil is down about 20% this year and i read with great interest this morning that revenues were down 12% last month, which will put a dent.

rep. sessions: thank you very much, mr. chairman. chair hill: mr. meeks is recognized for five minutes. rep. meeks: i'm made plain, simple man. do trade deficits constitute a national emergency? sec. bessent: the hollowing out -- rep. meeks: just yes or no. sec. bessent: a national emergency, sir. rep. meeks: you are telling me trade deficits equals, creates? sec. bessent: persistent and prolonged. rep. meeks: ok, do you know that for the last four decade we have had trade deficits in the united

states of america and nobody said it was an emergency? democratic and republican presidents? do you know what that says to me? that it is not an emergency because it hasn't been for four decades. it says to me we should bring tariffs back to the united states congress so that we can make that determination as the constitution has said and not try to go around congress. it is unbelievable to me. let me ask this question. maybe i missed it. who has been the president since january 20, 2025? sec. bessent: donald j. trump. rep. meeks: who was the president in 2024? sec. bessent: one believes

president biden. rep. meeks: one believes? [laughter] are you one of those nonbelievers that the american people didn't vote? sec. bessent: i am not. rep. meeks: you said one believes? do you believe in the constitution of the united states? sec. bessent: i believe in the constitution of the united states. rep. meeks: see you believe that. without any second thought. you don't have to think about it, you believe in it and you will abide by it. is that correct? sec. bessent: i have and i do. do you know that a president has said we may -- he may or may not, he don't know? let me ask you this question. i couldn't believe my ears sunday during meet the press,

president trump credited himself with the economy in 2024 but then he blamed president biden for a week economy in 2025 when he was president. i'm not so sure how the american people put that together. in 2024, strong economy, he tried to take the credit. in 2025 when he tried to take the credit, he blames joe biden. that doesn't make sense to me. i don't think it makes sense to most americans and i hope mr. secretary, you are a businessman, it doesn't make sense to you either. it can't possibly make sense to you. let me ask you this question.

i remember when i came here and argentina kept failing to pay its debt. not once or twice or three times. we were all upset about it and we said somebody should help the president of argentina. that we would be very upset that we could not pay our debt. sec. bessent: the united states will always meet its debt obligations. rep. meeks: always. well let me ask you this. donald trump the dealmaker and you didn't answer miss alaska's's questions. he said three weeks ago there would be deals. donald trump not once, not twice

, not three times, not four times, not five times, but six times failed to pay his debts on his business and went bankrupt and you are going to call that a good businessman? chair hill: the gentlemen's time has expired. the gentlewoman from missouri, was -- ms. waggoner, is recognized for five minutes. rep wegner: i think you mr. chairman. i will try to keep my tone down. i think secretary besson for your testimony. i'm going to try to stick to the actual title of this hearing and why we are supposed to be here today which is the state of the international financial system. under the biden administration, congress required treasury to determine whether any chinese financial institutions were

engaged in oil purchases from iran. no matter how small or how large the transaction. the president ordered sanctions on any oil. can you describe how i think we all will know how iran uses oil sales to fund, treasury is now over half a year late with the statutory determination on chinese buyers of iranian oil. the first is why has it not been

submitted. why had the previous administration not done anything to prepare for this? sec. bessent: all three of those i will have my staff get back to you on that. since i have become treasury secretary, the treasury has repeatedly sanctioned so-called chinese teapot refiners who are large fires of iranian oil, independent refiners away from the state enterprises. we have begun that program over the past few weeks and we will continue as needed. rep. wagner: i know you are in negotiations with that 18th country, china. we are thrilled to hear of your trip there.

that purchase of iranian oil does nothing but lift up a regime that does nothing but fund terrorism throughout our world. what actions is treasury taking to combat cooperation between iran and china on illicit finance and money laundering? sec. bessent: the secondary sanctions on these teapot refiners has been a very fulsome effort. when president trump left office, iranian oil exports were between 100000 and 300,000 barrels per day. now they are 1.6 million barrels per day which allows them to finance terror proxies all around the world.

rep. wagner: correct and we have seen it and we have lived it and it has caused unbelievable death and devastation and resources and loss of life and i'm proud the president himself endorsed sanctions on any purchase of iranian oil. switching gears, and february, several members of this committee and the senate and the chairman and the senate banking committee sent you a letter voicing can turns about the european union's corporate sustainability due diligence directive for csddd. this directive will require many american companies to evaluate their supply chains and and certain business activities not

based on u.s. law, but due to u.n. principles. it hurts our economic competitiveness but also undermines our jurisdictional sovereignty. it would force public and private sovereignties to comply with regulations that have not been approved by congress well exposing them to litigation risk in the eu. i'm running out of time, but this is something i feel strongly about. it is in the international realm and i have two questions regarding this. chair hill: the gentlewoman's time has expired. rep. wagner: i will submit them for the record. chair hill: recognize mr. scott from georgia for five minutes. rep. scott: thank, chairman. secretary besson, let me ask you this, do you agree that the fbi see plays a very important role -- a central role in safeguarding our depositors, ensuring prudent bank

supervisors and maintaining this safety and soundness of our financial system? sec. bessent: congressman, i agree that i will functioning fdic is essential to the u.s. financial system. rep. scott: on monday, you said this and i quote, you said this, that the president task do you with helping him choose the leader of the financial regulators so that we are all aligned, all regulators, to be safe, sound, and smart. you went on to list the key positions where you have done that including a new vice chairman of supervision of the fed, a new head of the occ, and carl atkins of the securities and exchange commission. and a new cftc commissioner. but as of this morning we have

no fdic chairman. full-time. it is now under temporary leadership of an acting chair named travis hill with the president having no current plans to either formally nominate him or find a replacement. the nation is watching us. why we don't have the head of the fdic. so my question is have you not helped president trump in selecting a chairman to lead the fbi see? sec. bessent: i would point out that under the previa administration there was only an acting chair of the occ for five

years, five years. mr. hill is the acting and as a matter of fact the head of the occ, the head of the cftc have not been confirmed, so those are in fact acting also. mr. hill is a very capable regulator, having been on the board of the fdic. rep. scott: you are filibustering here. i'm not questioning that. have you been instructed by president trump to refrain from offering a list of viable candidates to lead the fbi see --fdic? sec. bessent: no, sir, i'm constantly reviewing the list and who will be best to be vetted. rep. scott: i want you to know i wrote a letter to the trump administration, here it is.

expressing grave concern of the erosion of independence and i would like to submit this for the record. chair hill: without objection. rep. scott: and we remain highly alarmed by this growing perception that our financial regulators have acquiesced to political pressure from this administration, perhaps even from the president of the united states, i wouldn't have a vacancy at a time and we are running tariffs all over the country, when our economy is in these kinds of difficulties. the nation is watching us.

russia is watching us. as the president is going around the country dealing with upsetting canada, places around the world. where are we going, when are we going to have a chairman? are we going to have an answer me truthfully. has president trump asked you to delay this appointment and if so why? sec. bessent: sir, that statement is incorrect, he has not asked me to delay that appointment i believe your question is when will we have an fdic nominees. we have an occ nominee, a cftc

nominee. chair hill: the judgments time has expired. sec. bessent: i would ask you to urge your senate colleagues on the democratic side to vote for it. chair hill: your time has expired. excellent discussion. rep. scott: thank you. chair hill: i recognize the distinguished chair of our subcommittee, mr. barr, for five minutes. rep. barr: thank you for issuing the national security memorandum entitled america first investment policy directing federal agencies to address outbound investments in china. in march, senator cornyn and i reintroduced my bill to restrict outbound investment. tell me, what do you think about that legislation in the context of the president's national

security memorandum? sec. bessent: congressman, i want to thank you for your leadership. my team and i, it is a new national security tool and we appreciate that congress wants to move forward legislation that is important and helpful. we would like a bit more time to inform the legislation so that it is durable because of the importance of this. rep. barr: thank you. i look forward to working with you and the president to align our legislation with the president's policy on this. i want to give you an president trump another tool of economic statecraft to increase president trump's leverage in his

negotiations with general secretary xi. this is a very important issue. there was recently a $75 million venture investment into a chinese artificial intelligence firm manus. is manus ai on the treasury entity list? sec. bessent: i will have my staff get back to you on that. rep. barr: i think the answer is no and that is why we need this legislation. so are outbound restrictions look at technologies of a national security concern like militarized artificial intelligence. i would also note that the waiver authority would give you

to displace the chinese in panama. president trump said we are going to re-privatize the economy, that is music to the american people's ears. when federal bank regulators are talking about repurposing the basel three endgame proposal, they have been saying for a long time we should do it in a capital neutral way abandoning former vice chair bars approach of a huge gold plating of bank capital. since the federal reserve started to use the term capital neutrality in 2019, capital was increased by 10% or 20%. when looking at our bank capital regulations, should we be in for

capital neutrality or look at capital levels set up road -- support american competitiveness? sec. bessent: as you know, i have been confirmed about our regional banks and growth of private credit outside the regulated system tells me many of the regulations may need -- be too tight in that business is pulled into the shadow market. i think we want to safely and soundly expand the regulated financial system and get them on equal footing and i think that these capital levels that are predictable are very important. rep. barr: last question about chinese investment in venezuela.

chinese officials were asked to increase oil purchases. tell me what you think about ofac licenses for u.s. companies operating in venezuela when those american firms could displace china to enhance american energy dominance? sec. bessent: it is a very acute balancing act between displacing china with u.s. entities providing hard currency for the maduro regime. chair hill: the gentle men's time has expired. rep. barr: i look forward to working with you. chair hill: recognize the distinguished gentleman from massachusetts, a ranking member of the digital assets subcommittee, mr. lynch, for five minutes. rep. lynch: thank you for coming before this committee in helping us with our work. mr. secretary, between march 11 and march 15 of 2025, you and

more than a dozen senior officials of the trump administration including secretary hegseth, director of national intelligence tulsi gabbard, national security advisor mike walls used a commercially available, nongovernmental, encrypted, nonsecure app to discuss and coordinate imminent u.s. military strikes in yemen in a group chat entitled youthi pc small group. particularly defense secretary hegseth shared actionable intelligence including sensitive and classified details of an intimate -- imminent strike against plans including precise launch times, the u.s. jet fighter assets, targeting locations of those rebels who were by the way equipped with

antiaircraft systems mr. hegseth share the targeting sequencing and described the u.s. weapon systems involved. the national security council has confirmed that this signal chat was on that and you had participated. we realize that for you, mr. secretary, because of the responsibilities you have even outside of the principles committee that group, you have a target on your back, our adversaries, china, north korea, russia, and others. can i ask you, have you been briefed on the proper protocols for discussing information such

as active military plans? sec. bessent: i have, by my general counsel. rep. lynch: i have a bunch of questions. i'm just trying to narrow this down. i'm just reclaiming my time. sec. bessent: my only contribution to that chat was my chief of staff's names. rep. lynch: let me ask the questions and you provide the answers. how about that? are you preserving records of these communications? sec. bessent: yes. rep. lynch: are you still discussing sensitive military intelligence on a nonsecure line? sec. bessent: i have never done that. rep. lynch: the national security council says you were on a chat that discussed those details. sec. bessent: i'm saying i have never discussed them. rep. lynch: someone discussed it

with you, you were on a nonsecure line for a meeting with other secretaries. sec. bessent: i was on the check. rep. lynch: so you could have intervened, you could have brought it up, you could have said this was an unsecure line, we are putting our sons and daughters in uniform at risk you could have done all of that. mr. hegseth afterword did the same thing with the family chat, his wife, his brother, his sister, family attorney. you do understand the troublesome nature of that, right? are you dismissing that and calling it a roaring success as the white house has done? this is troubling.

i just want the reassurances for this committee and for other members of congress and most importantly for the families of americans who send their sons and daughters into harms way, they put on that uniform, i just want the reassurances that we aren't doing -- this buffoonery has to stop, right? at some point. there are serious consequences to not complying with security protocols. mr. secretary, you are a smart guy. you are a smart guy. you didn't create this situation. you were drawn into it. i'm just trying to reassure the committee that this stuff is not happening anymore. chair hill: the gentleman's time has expired. rep. lynch: allow the gentlemen to answer? it is a yes or no. chair hill: i think the gentleman's time has expired. sec. bessent: congressman, i'm

happy to say that because of my age i pick up the phone and call people. chair hill: the gentleman's time has expired. the gentleman from georgia, the vice chairman of the subcommittee, mr. loudermill, is recognized for five minutes. rep. loudermilk: thank you for being here. i think you and i are both aware of the paradox of the u.s. reserve currency status. the so-called dilemma says that to maintain the benefits of a global reserve currency status we may always run a current account deficit which risks undermining global confidence in the dollar. the u.s. enjoys an exorbitant privilege from the dollars reserve status. this means that there is a high demand for dollar denominated data -- assets worldwide substantially lowering borrowing costs and allows us to run sustained trade deficits and drives capital investment to the united states. how is our current reserve

status different from what it was under the bretton woods system on the dollar was convertible to a fixed amount of gold rather than flopping? sec. bessent: well, it is now based on the full faith and credit of the united states rather than backed by gold. rep. loudermilk: does the demand for dollars and the u.s. debt worldwide and the reduced borrowing costs contribute to some of our failing physical stewards? sec. bessent: i would say our unfettered ability to borrow has made us more profligate as there is more potential for market discipline to date. with the administration, i'm trying to set the country on a path to avoid that. rep. loudermilk: i appreciate that. i've said i don't feel there is the political will within

congress to restrict spending and balance the budget. i appreciate the work you are doing there. is there a world where we can have our cake and eat it too? is there a policy configuration where the u.s. can maintain the best elements of an exorbitant privilege while also having a balanced export economy? sec. bessent: yes, sir, there is . i would point out that the exorbitant privilege that i believe a french politician called it does not always result in the lowest interest rates. china's interest rates are lower than ours. most of the eu interest rates are lower than ours. rep. loudermilk: ok. for several years i have called to raise the threshold to some higher value, working on

legislation, this threshold would be between $74,000 and $80,000. we are still stuck at the $10,000 limit. what threshold best balances compliance costs? sec. bessent: congressman, i'm not sure what the equilibrium level is. what we have discovered we are now examining that and we are finding that sometimes higher is better and lower is better. there are 40 counties that

account for a substantial amount of the cartels, so we have lowered that to $200. we are finding great efficacy there in pushing the cartels. rep. loudermilk: i can understand and appreciate that. one of the issues we have nationwide is the compliance costs that goes to small financial institutions. trying to find current financing is looking for a needle in a haystack because of the volume of words being made. i'm sure we can work on something to make exemptions during times like we are talking about now.

maybe not to increase the size of the haystack, but reduce the haystack so it becomes more prevalent, the illicit financing. sec. bessent: look, congressman, i'm hypersensitive to the needs of the banks and the undue burden being placed on them. rep. loudermilk: look forward to working with you on these things. chair hill: the ranking member, the gentleman from texas, mr. green is recognized. rep. green: i think the witness for appearing. mr. treasurer, when you testified before the senate, you indicated that the cdf i fund is a very important program. is this correct? sec. bessent: i did sir. rep. green: is it true that you

would not agree that it is a woke program and has cultural marxism associated with it and that it is abused? you would agree with that? sec. bessent: ice -- i think the cdfi is performing at statutory funds as required. rep. green: is the statutory function to be woke? sec. bessent: i have never seen that in the statute. rep. green: what about marxism? is that associated with it in the statute? sec. bessent: again, i have never seen that. rep. green: given the president desires to cut into this program, you are the secretary of the treasury, what are you going to do to protect it? sec. bessent: sir, the skinny budget does propose a new $100 million work program that would provide access to affordable financing. rep. green: does that take care of the $12 billion to support the cdfi?

that is quite a distance from the 12 billion dollars, sir. what are you going to do about it? do you advise the president? sec. bessent: sorry? rep. green: do you advise the president? sec. bessent: i advise the president on a wide range of matters. rep. green: is this considered part of a wide range of matters? would you advise the president he wouldn't cut these funds? sec. bessent: i look forward to working with you to make sure these committees operate efficiently for taxpayers. rep. green: what about efficiently as a result of them being in place to do so? if you don't have the money, they can't be efficient. they can't serve the taxpayers if you have them -- don't have the money. 61% of these programs are in republican districts. sec. bessent: is there a question? rep. green: it is a question in the sense that i'm asking you to suggest to the president that this is important and that you not cut it. sec. bessent: as i said -- rep. green: one hundred million

dollars is quite a distance from $12 billion. sec. bessent: that is not the annual appropriation. rep. green: no, but $12 billion is what we a bipartisan group of folks put into the cdfi's as well as into the minority depository institutions. we don't want to see that cut. let's go to another area. do you agree that when a tariff is imposed upon a product coming into this country that the tariff is collected at the border? sec. bessent: yes, sir. rep. green: do you agree that that money that is collected goes into the treasury coffers? sec. bessent: yes, sir. rep. green: do you agree also that if the person importing this product is of the opinion that it is something that the customers desire that he will pay that tariff? sec. bessent: yes, sir. rep. green: do you agree that

when he pays that tariff he is likely to pass it on to his consumers? sec. bessent: through the laws of economics i would say there is elasticity. rep. green: i understand but do you agree that he is likely to do that? do you agree that he does it sometimes? sec. bessent: again -- rep. green: does he ever do it? so your position is as the great treasurer you are that this is not passed on to the taxpayers. consumers. sec. bessent: it could be. rep. green: is it ever? it is hard to say yes, isn't it? don't fear the president, sir. is it ever passed on? have you ever heard of this tax money being collected and passed on to the consumer to pay? have you ever heard of that? sec. bessent: the most recent studies -- rep. green: let's go on to this. excuse me. reclaiming my time i have a better point. i only have a little bit of

time. when it goes into the coffers, that money is then going to be a part of the tax dollars that can be accorded to persons in terms of a tax cut. is this true? sec. bessent: it is part of the overall -- rep. green: yes, it is true which means that the consumer, the person who pays that tax, this tariff tax when he makes that purchase is going to put his money in your coffer, our coffer and then the president later on can say, you got a tax cut, but it is really the money the consumer has put into your coffer. that is true. i yelled back. chair hill: the gentleman yields back. the gentleman from ohio, the chair of the national security illicit finance subcommittee, mr. davidson, is recognized for five minutes. mr. davidson: i applaud your eloquent speech at the milken

institute and thank you for helping to lead it. my subcommittee aligns completely with your efforts on illicit finance on trade with the pending reauthorization of the defense production act. outbound investment. laws and clarity. i remain highly concerned about the future of money and probably the most important policy debate we are having. i will save that. you are removing beneficial ownership reporting requirements, the prior was to collect information on illicit finance. by narrowing the scope of the rule you are focusing on the signal. millions of americans have shared sensitive personality information. as the committee moves forward,

would you support the deletion of data under the previous rule? sec. bessent: my staff is working on what will happen to that data and we will get back to you on that. rep. davidson: appreciate it and we hope you safeguard it always. it would be especially safe if it is deleted. the united states executive director at the imf should use the voice and vote to oppose any increase in the weight of the chinese r&b in the basket of currencies to determine the value of special rights. this bill has passed the house on a bipartisan basis most recently in february and it still awaits senate action. mr. secretary, for more effective than waiting on the senate is your leadership. would you advocate opposing an

increase until china straightens itself out? sec. bessent: i look forward to working with congress on this issue. rep. davidson: wish you great success in your pending negotiations. they never really have to worry about default on the belt and rode. they are using their influence in the imf and world bank to frankly cover risk at the belt and rode. you have already covered outbound and i appreciate the dialogue on that. let's turn to the defense production act. national security is paramount to that.

as we organize and update the defense production act, it deals with the department of defense. would you commit to working with our committee to get a final reauthorization across the finish line this year? sec. bessent: i think it is an important piece of legislation we look forward to working with you on. rep. davidson: thank you, mr. secretary. the imf set up a climate fund in 2022 known as the resilience and sustainability trust. given concerns, will you work so it can get back to its core mission?

sec. bessent: i expressed the need to get back to basics at all of the multilateral development banks especially the imf. rep. davidson: as chairman hill and i met with the -- met, they highlighted things they were doing for national disasters. i'm confident you will get it right to the extent that we can be helpful in that as we reauthorize these programs and i thank you for your clarity so that american interests are focused with the use of american resources. thank you for your steadfast work and your testimony today. chair hill: the gentleman yields back. the gentleman from illinois, the ranking member on the financial institution subcommittee, dr. foster is recognized for five minutes.

rep foster: thank you for your courtesy call where we identified common interests. i want to speak about decline of u.s. manufacturing. i'm very concerned about it. i started this company when i was 19 years old. it provides manufacturing jobs in the midwest. we had to live through all of the bush policies and the china and it is not an easy thing. it is affected by many things including central bank policy, interest rates, tariffs, the balance of trade.

i believe the strength of the dollar reflects the world's confidence in the u.s. economy and the competence of u.s. leadership and the value of products made by american workers and our reputation as a fair place to do business and the rule of law in america. secretary bess and, earlier this week you ran an op-ed in the walls journal echoing many of the points you made in your testimony and you promised more jobs, more manufacturing, more deregulation, lower taxes, less national debt while maintaining a strong dollar. on the other hand, trumps choice for the chair of the council of economic advisers wrote a paper arguing for weakening the dollar through something he called the mar-a-lago accords, which you have reportedly been placed in charge of negotiating. the president has been all over the map on a daily basis on whether a strong dollar or a weak dollar will make america great again. my question is what is it? does the administration support

a strong dollar or a weak dollar? sec. bessent: i will work a little backwards. when he was in the private sector, i think it related to a range of outcomes. two, i believe that the conditions for a strong dollar are important for international confidence. again, when we think of strong dollar, what is a strong dollar? is that the composite on the bloomberg of all currencies? is it a trade-weighted dollar? then we can look at bilateral relationships because much of that could be not so much a strong dollar, but other countries manipulating and suppressing their currencies. rep. foster: we lived through that in the bush administration and it is not a reaction to what china is doing, i know all about

that. it is interesting to look at the historical record. i have behind me a plot of the strength of the u.s. dollar under recent presidents and i believe your stats -- staff has a copy if it is easier to read. what it says is remarkable. it says that under every republican president, reagan, bush, bush jr., donald trump, donald trump ii, the dollar has weakened. under every democratic president, the dollar has gone up significantly. i don't think that is an accident, i think it is because of the factors including predominantly the confidence the u.s. will maintain a well regulated and well governed economy and a fair place to do business. on that handout, which i think has actually been given, do you have the copy with the graphs on it?

we can get you another copy if you want, the argument in favor of the weak dollar, it should make manufacturing easier in the united states. that is one of the arguments for it, but if you look at the historical record here, if you look at for example change in manufacturing employment under democratic and republican presidents, it is remarkable. for longer than you and i have been alive, democratic resident seven manufacturing employments and republicans have decreased it. from fdr, truman, kennedy, johnson, clinton, obama, and biden increased manufacturing employment. eisenhower, nixon, reagan, bush, bush ii, it dropped. how did republicans managed to weaken the dollar and we can manufacturing employment at the same time? it seems like that is completely crossways to the narrative we are hearing from this administration? sec. bessent: well, sir. chair hill: the gentle men's

time has expired. the secretary can answer in writing. the gentleman from tennessee, the vice chairman of oversight investigations subcommittee, mr. rose, is recognized for five minutes. rep. j. rose:: i want to thank you for holding this hearing and think you for being with us today and answering questions. secretary, given that the u.s. mint's fiscal year report shows that the nickel, the u.s. nickel now costs 13.7 eight cents to produce and that experience in other countries suggests that our nickel production or demand would double, triple, maybe even multiple times beyond that if we eliminate penny, is treasury analyzing the risk that stopping penny production alone could worsen our coinage losses by pushing annual nickel losses well past $200 million?

sec. bessent: congressman rose, we have looked at this and we believe it is possible by changing the composition of the nickel to bring down the cost to five cents or less. rep. rose: absolutely, that was going to be my next follow-up question. sec. bessent: i would point out that the dime is very profitable. rep. rose: it will sound like a little self-interest, but a tennessee company is one of the folks that could lower the cost of the nickel and has made a proposal that i know -- sec. bessent: we are investigating that with them and are very intent on maintaining those jobs. rep. rose: from my deep dive into penny and nickel production, it seems to me that there are significant savings beyond just saving on the composition of the nickel. i would encourage treasury and the mint to look at refocusing how we produce those coins to make them actually positive for

the balance in terms of producing seigniorage for the united states. glad to hear you're moving in that direction. the president has made budget requests that proposed significant cuts to the cdfi fund and suggest to end core cdfi programs. you have made public comment about it. do you believe it should continue to play a role in supporting access to capital in underserved communities across the country? sec. bessent: congressman, as i told the congressman on the other side of the aisle, we are creating a new $100 billion award program that would provide access to affordable financing and this would be mostly in rural america. rep. rose: excellent, i'm glad to hear that.

i'm glad to hear that. broadly, i want to say it is refreshing to have competent, aggressive, energetic leadership, so i commend you for that and i'm very excited about the things you are doing. can you discuss the significance of confirming president trump's regulatory appointees in advancing his america first agenda? out of these appointments impacts the implementation of these important policies to move america forward? sec. bessent: yes, sir. i believe it is important to do this as soon as possible. we have some very good acting chairs. the sooner we can do it, the sooner we can get down to the

business of making those institutions work better for the american people. and making sure that mainstreet can prosper. i have been very concerned. the personal meetings with over 15 community bankers, i spoke to more than 300. i think it is important to keep these regulators in place so that small regional banks can make sure that mainstreet participates with the rest of the country. chair hill: i completely agree and that is what i'm hearing in my district. sec., given the imf's limited success in pushing debt restructuring, how can treasury justify supporting the imf current leadership? sec. bessent: we are in constant discussions.

it is leadership i inherited thus far. they seem very open to the trump agenda, america first and advancing the issues that most affect the american people. rep. rose: thank you mr. secretary. i yelled back. chair hill: the gentlewoman from ohio, the ranking member on the illicit finance institution subcommittee, is recognized for five minutes. rep. beatty: thank you. the trump administration has alleged that detecting and deterring transnational criminal organizations such as iranian terrorist groups and proxies is a priority for national security. but on march 2 of 2025, your department announced that it would not enforce any penalties

or fines associated with the doi reporting rule. nor will it enforce the cta against u.s. citizens or their beneficial owners. i'm a little confused with how you square those two things. would you explain to the american public how you undermined the bipartisan cta and expect a law enforcement and national security agency is quickly and effectively know the true owners behind shell companies registered in the united states now that foreigners including a drug cartel, gang members could register a company in the united states with no stay or any federal ownership? i remind you that we talked

about illicit actors. these are some of our illicit actors. sec. bessent: congresswoman, an overwhelming majority of the domestic entities that you are describing our hard-working americans with small businesses. we bifurcated the bill and any foreign entities must still file. rep. beatty: so you are saying to me it is not true, that they must file, that they must file, the foreign entities must file the voi? sec. bessent: yes. we bifurcated, we bifurcated the cta program, that domestics do not have to. rep. beatty: so, may be unmasking it the wrong way. so it appears that they are registering to avoid the transparency of who the

companies are? sec. bessent: i'm not sure what your question is. i would be happy to answer it. rep. beatty: if you are saying it is not true and that they are complying, you are saying everybody is completing it? sec. bessent: no, i'm saying we have bifurcated it, that u.s. nationals do not have to file and that foreign nationals do. rep. beatty: ok, when we look at this if we are limiting enforcements just to the foreign entities, that creates a giant loophole whereby any foreign entity can register in the united states and avoid the reporting requirements? sec. bessent: they would have to

come through a u.s. financial institution, so they would be subject to all u.s. financial institutions. rep. beatty: including the be oi? including the be oi? yes or no? because the answer is no. you can say it however you want to, but the answer is no. this makes it easier for human and drug traffickers, cartels, terrorists, and organizations to do business. in the united states. this would exempt the businesses congress intended to cover. i think i do have my answer, we are just not agreeing on it and we know why. it is my time, let me go to my second question. it is my time. it is my time.

you will not do this on my time. now, i'm going to ask for a few more sec. since he refused to comply with my time, not his time. former secretary jack lewin announced that harriet tubman was to be the new face of the $20 bill. can you tell me what is the current status of this project? sec. bessent: no, ma'am, i can't come about my staff will get back to you. rep. beatty: no, i want you to get back to me. there seems to be an issue when it comes to things that affect people of color or people who live in poverty, whether it is what you are doing with social security, what you are doing with restricting funds. chair hill: the gentlewoman's time has expired. the gentlewoman's time has expired. rep. beatty: mr. chairman, i need him to answer. chair hill: the gentlewoman can submit questions to the record. rep. beatty: mr. chairman, i'm addressing it to you to ask him to respect, mr. chairman.

chair hill: the gentlewoman's time has expired. rep. beatty: i need him to address whether he will answer me. i'm not going to stop until you -- chair hill: the gentlewoman's time has expired. the gentlewoman's time has expired. rep. beatty: mr. chairman, point of order to you. i will not stop, i will not be silenced. chair hill: the gentlewoman is not offering an appropriate parliamentary inquiry. does the gentleman have a parliamentary inquiry? rep. beatty: i do. as a member of the united states congress addressing the secretary, i'm asking you to rule on asking this hostile i am asking you to ask this witness to direct his response to me vs. having him tell me that his staff will respond to me. my staff person to invest in the question, i did. chair hill: the gentlewoman does not state a parliamentary

inquiry. >> so let me ask a point privileged to you mr. chairman because i'm not going to stop this until you respond to me. if you will direct the secretary to respond to me as a member of congress. chair hill: the gentlewoman's time has expired. the gentlewoman's time has expired. the gentlewoman will suspend. the gentlewoman will suspend. the gentlewoman will suspend. the gentlewoman will suspend. the gentlewoman -- >> it is a request a personal privilege. rep. beatty: you can simply ask him to respond. ask him if you will respond to a member of congress vs. staff, simple as that. chair hill: i ask that members keep decorum and remain cordial during today's -- >> i am being cordial to you. chair hill: the gentleman will suspend, the chair at the time. the gentleman will suspend. the gentlewoman will suspend. i asked the members keep decorum

and remain cordial. rep. beatty: i am being cordial, i resent your statement to imply that i am not. i am a member of the u.s. congress. i am asking this -- chair hill: the gentlewoman may submit few have are for the record which will be responded to by the secretary. rep. beatty: thank you. chair hill: the gentleman from texas, the chairman of the small business committee, mr. williams is recognized for five minutes. mr. williams: thank you, i will try to fast-forward. the chinese communist party has enabled their economy to serve as a central hub for money laundering, human trafficking and the expert of chemicals used to manufacture fentanyl. mexican drug cartels providing laundering services, digital payment platforms and chemical shipments

pose a direct threat to u.s. national security, public health and financial integrity. so my question is can you elaborate on the steps treasury is taking to disrupt the flow of illicit financing, money laundering and drug trafficking between chinese entities and mexican drug cartels? sec. bessent: thank you for that very important question. and know that they are interlinked, that the chinese provide precursory drugs that are then converted into fentanyl by the mexican cartels. just today, i signed an order that will be made public within the next few days identifying chinese entities engaged in the fentanyl trade. >> great. for too long china has taken advantage of the world's system and has become the largest creator. the focus on climate social initiative has resulted in a lack of accountability for

unreliable economic data. currency manipulation and opaque predatory lending practices. in addition the lack of accountability they shifted to a climate that has forced many companies to turn the chinese financing. the u.s. must leverage its leadership on the world stage to counter china's growing influence and put an end to be deceptive economic practices. secretary, how is treasury working to prevent imf and world bank resources from indirectly legitimizing china's deathtrap diplomacy and economic oppression? sec. bessent: congressman, in various ways. one as you would have noticed, when this horrible russia-ukraine conflict ends, no country or person who financed the russian war machine will be eligible for any rebuild in ukraine, especially financed by the world bank or any of the

other multilateral development banks. also, we are working with the oecd especially to look at -- and the imf and the world bank to look at the true debt levels for these countries. everyone save one country agrees that this is a problem, that there are rapacious mineral deals, and it is impossible to know and assist a country that has experienced economic hardship when we don't know the true levels or if there is an undisclosed priority payment to another creditor. >> i was encouraged to hear that you are taking the bank reg literary framework to better reflect a level playing field across financial systems. as part of that review i hope you will consider where u.s.

regulations may deepening banks and financial institutions at a disadvantage compared to our foreign competitors. in particular i urge you to weigh the impact of basel three endgame and leverage requirements, especially whether these changes can limit -- limit thank ability to compete the economy and compete globally. are there any specific areas where you plan to address these concerns putting u.s. institutions at a disadvantage such as in the re-proposal of the endgame ruled by amending the surcharge regulation? >> congressman, we are looking across all bold areas and know that this is at the top of our agenda, that most countries have very concentrated banking systems. in many cases, the banking systems are larger than the gdp of the countries, so they have very different needs than the united states. to strengthen the united states, lending and capital markets and economy is the depth of our

financial institutions, and we will continue to advocate for them both at home and abroad. >> thank you for your service, i think you are doing a great job. chair hill: the gentleman from california, the ranking member on the task force on monetary policy mr. vargas is recognized for five minutes. mr. vargas: thank you very much for holding this hearing. mr. secretary, it is great to have you here. i want to thank my colleague and friend from texas for asking the question about russia. do you consider vladimir putin a war criminal? sec. bessent: yes. mr. vargas: would you negotiate with a war criminal? sec. bessent: i think that is the nature of diplomacy. one must negotiate with both sides, sir. mr. vargas: so you will be negotiating with a war criminal. sec. bessent: i believe that negotiation was needed with the japanese after world war ii.

mr. vargas: thank you for that answer. are you familiar with with president trump has called his one big beautiful bill? sec. bessent: yes sir. mr. vargas: could you describe the basics? sec. bessent: it is a combination. the core of that bill was to make 2017 cuts and jobs act permanent. mr. vargas: if this big, beautiful bill passes, will the deficit go up or will the deficit go down? sec. bessent: i believe over time the deficit to gdp, which is the important number, and secretary yellen agrees with that, will stabilize and go down. mr. vargas: so next year will it go down? sec. bessent: sir? mr. vargas: yes? sec. bessent: i believe yes. mr. vargas: so if the big, beautiful bill passes, you believe the deficit will go down next year. sec. bessent: the deficit to gdp will.

again, what is important is that we grow the economy. mr. vargas: i understand that. of course. but you say that in the long term. and asking short-term will the deficit go down? sec. bessent: i believe the deficit -- the debt to gdp can go down. mr. vargas: but what about the deficit itself? the amount of money that comes in as opposed to going out. will the deficit go down next year? sec. bessent: will it go down from 2024 and 2025? i deleted it will. mr. vargas: ok. what about the long-term debt? will it go up or down? if the big, beautiful bill passes? i think the reason you are having a hard time answering -- sec. bessent: i'm not having a hard time answering. mr. vargas: i've given you plenty of help. sec. bessent: as secretary ellen said, the debt to gdp. if our gdp -- mr. vargas: everyone is talking

about the $37 billion, is it going to go up or down? up or down? sec. bessent: it will likely go up -- mr. vargas: i think that is the interesting thing. my colleagues on the other side always talked about reducing the debt and reducing the deficit, and yet the hypocrisy of trying to pass a big, beautiful bill that will cause both of them to go up. sec. bessent: no sir, i did not say -- mr. vargas: i know you didn't say it, you are trying not to say it. sec. bessent: i actually said it would not go up. mr. vargas: i know you did. you said the number would go up. sec. bessent: to be clear, last year 6.7% deficit to gdp. mr. vargas: no, no, i'm asking the actual number. sec. bessent: under the previous of ministration -- mr. vargas: we are asking about numbers here. i'm not going to let you get away with that one because it's very clear what is going to happen if they pass the bill. the deficit is going to go up and the debt is going to go up

and we are going to see the hypocrisy of them always saying cut the budget so the deficit is going to go down, and the debt is going to go down. it's not, it's going to go up. i do want to ask you about the independence of the fed. sec. bessent: yes sir. mr. vargas: you have been on both sides of the fence. you say that we need an independent fed but at the same time you say they should have been a shadow fed. sec. bessent: since taking office, and i have refrained from commenting on fed monetary policy, and i've said that monetary policy is a toolbox. mr. vargas: can i do want to ask this because a number of my colleagues brought it up about the coastal elites. where did you go to school? sec. bessent: i grew up in little river, south carolina. mr. vargas: you graduated from yale. you were part of a well fed society, one of the big three. sec. bessent: i worked three

jobs to put myself through -- mr. vargas: the thing that i always get, the funny part is always talking about the coastal elites, you are a billionaire that went to gail. i don't hold that against you. i just want to call it. talking about the coastal elites, and yet the president and yourself are both coastal elites. sec. bessent: i made all my own money, sir. chair hill: the gentleman yields back. i recognize myself for five minutes. earlier today you referenced the electric slide. i will share my concern. ring four years of the biden administration we were sliding behind foreign competition, in particular in the digital asset space from the bahamas to china. and i want to ask you what would happen if we put our heads in the sand, if we object, if we walk out of that type of leadership role, which i think is so essential, to make sure that the u.s. continues to lead the way in web three as we did in web two? and in particular, how does the

leadership in digital assets play into president trump's broader agenda, and specifically how many dollar denominated stable coins impact dollar dominance in treasury markets? >> thank you for that very important question. our goal is to encourage firms to reassure, bring back the united states best practices here in the united states without stealing back their ambition to influence the global industry. the administration's efforts to promote clear, regulatory frameworks for digital assets will contribute to this goal. so will ongoing efforts from a fair access, interoperability payment technology across all borders. we will continue this for private sector solutions and discourage public sector solutions that distort markets and stifle competition. rep. steil: let me jump in because i think that is spot on. and then let's talk about what happens if we fail to act.

yesterday some members objected, walk out of the hearing to discuss market structure and digital asset and absolutely essential leadership roles in the united states. what happens if we walked out on our responsibility to lead in the digital asset space, and what would occur if web three center of gravity shifts away from the united states to countries like china or other locations? sec. bessent: numerous things could occur. as we saw under the previous administration, an entire ecosystem unregulated and renegade springs up outside the u.s. and illicit actors abuse the value of these transfer systems, and there is a technological loss here. rep. steil: can you walk us through or share any of your impressions from the conversations you had with your counterpart abroad as it relates to their experience with regulating in the digital asset base? sec. bessent: they believe it is

very important and i believe that they are a little worried that the u.s. is willing to restore its leadership here. and as i said earlier, there is a chance that digital assets can provide a substantial source of demand for the u.s. dollar. rep. steil: in my bill which regulates dollar-denominated stable coins, we get the treasury the authority to identify which foreign stable coin regulatory regimes are comparable to ours. what are the key aspects of comparable regime and are there lessons or criteria that we could draw from other similar areas in the financial services base? -- services space? sec. bessent: we had the blueprint with bank regulation and adherence to anti-money laundering laws around the world . financial stability, and i would guess 70% of countries would be

very easy to judge yes or no, and then there would be another group. that is why i believe that some of the bills encourage facing this in. rep. steil: a lot of stable coin, a lot of digital asset space needs reliable banking services. could you comment briefly on the treasury is working with bank regulators to ensure that financial institutions can safely participate in this emerging industry? sec. bessent: we've recently delivered a report to the president on this, so we have safe and sound best practices, and we want to work with the financial industry with new companies and entrepreneurs as well as incumbent. there is a solution to banks to participate in this business, whether it is through custody or

their own coins. rep. steil: let me shift gears really quickly. president trump issued an executive order on modernizing payments to and from american bank accounts. the executive order noted that the treasury checks are 16 times more likely to be reported lost or stolen or return as compared to electric transfer funds. do you think we are making real progress in this space? sec. bessent: all speed ahead. the congresswoman from staten island told me of numerous losses of checks in the postal system and that is both cost-cutting and good practice, sir. rep. steil: thanks for being here today. i know recognize the gentleman from texas for five minutes. mr. gonzalez: thank you for joining us this morning. according to the wall street journal, oil and gas companies have lost over $280 billion in market value in april of this year alone. more than any other sector. this decline is attributed to a combination of factors, but

mostly attributed to the tariffs. at a recent dallas federal reserve meeting, a veteran energy ceo said "i have never felt more uncertainty about our business in my entire 40 years in the industry, and this turmoil is no accident. it is a direct result of mr. trump's vandalism." just yesterday, diamondback energy, one of the largest producers told shareholders that tariffs are adding significant cost to drilling activity. that is mostly due to the tariffs to our neighbors to the north and south. mr. secretary, the chaos in the energy sector has eclipsed any gains from president trump's industry-from the regulatory rollbacks that they were so much looking forward to. stable energy prices depend on stable policy. the trump administration pledged to support american energy sector, however this decline demonstrates the opposite.

given these outcomes, how do you reconcile the administration support for energy sector with policies that appear to have directly undermined its stability and global competitiveness? sec. bessent: i would take issue with the idea that it was tariffs. we've seen one of the largest decreases in the underlying price of crude in history. mr. gonzalez: that's right. there is not a single energy ceo in america right now that would agree with you. they are all at treating their downfall right now, the trouble they are having to the tariffs and they need some relief. what is the ministration going to do? sec. bessent: you and i must speak to different energy executives because i speak to them quite a lot. mr. gonzalez: i spoke to api today. sec. bessent: i will note that opec has done a substantial supply increase in the history of substantial effect supply increase -- mr. gonzalez: the tariffs are just making it worse. china is no longer buying, neither are a lot of other

countries around the world. sec. bessent: i think we've seen , the head of continent resources has said he is reassuring his supply chain and he believe that over time, he did not save any money, any money by outsourcing the equipment. rep. gonzalez: sec., our energy industry is hurting and they need your help. i know you are a smart man and one of the most stable people in this administration. you need to talk to the president about this. this is hurting the industry and the american people and more needs to be done. i have another question that i want to talk to you about that is hopefully a little easier and that has to do with our shrimping and fishing industry. as you may know, our domestic shrimping and fishing continue to experience economic hardships caused by an increase of foreign imports, high fuel prices, labor shortage, immigration relation, and alternate matters worse, we have flooded the nest exceeded

mark with foreign farm raised shrimps, many which are subsidized plan american federal dollars and international filing -- financial institutions. we need to put an end to this. what are we doing in terms of tariffs to helping this industry that is hurting? if we want to talk tariffs there are some that work in a think this is certainly an industry that needs a lot of help. it is on the verge of collapse. if we continue down this path we will rely on imported seafood and certainly imported shrimp which is hurting the seafood industry. i don't know how familiar you are with this industry, but i'm curious to hear your opinions and what can be done to improve this. sec. bessent: as i mentioned earlier, we grew up in a fishing village when i was young, 500 people, so i am very attuned to that. again, on one hand, you're saying you don't like tariffs. on the other -- rep. gonzalez: no, i don't like

tariffs on our energy sector. we do need tariffs in certain industries. this is one that i think would make sense. sec. bessent: i agree, and i would be happy to work with you on this. we've worked with the alaska delegation extensively on what is happening with russia and illegal fishing and sales to china. we would be happy to work with you. rep. gonzalez: i will be in touch with you. thank you so much and i yield back. rep. steil: mr. timmons is recognized for five minutes. >> secretary bessent, you are respected by the president, leaders on wall street and the broader international financial community. your study and leadership is appreciated on both sides of the aisle and after an abysmal four years it is encouraging to see thoughtful and serious leadership guiding this discussion once again. and i would like to let a personal note, both of us call south carolina home and my

family also came to charleston in the 1600s. i know you understand the economic landscape of south carolina deeply and that perspective is invaluable. let me start with a question about the textile industry. south carolina and my district in the upstate has a long history in textiles. for over 100 years it was more than just an economic sector. it was part of the cultural and social fabric in our communities. there was a drastic shift in the 70's and 80's. well-intentioned regulations related to labor and the u.s. economy no longer competitive. while i agree with the policies that we should not dump chemicals into the rivers and we should not have 120 degrees in factories and people should only work 40 hours a week, we need to focus on being competitive and those regulations, all they do is push all of our jobs to china, or most of our textile jobs to china. china took advantage of it and they incentivized and subsidized

manufacturing, capturing an enormous amount of the market share. hundreds of thousands of jobs were lost in the south. recently you made a comment suggesting we do not need to bring the booming textile industry that once defined the region back. that statement stirred some concern from some of the company that survived in the district. i agree with your broader point that we should not return to producing low-quality goods just for the sake of manufacturing in the united states. i do want to ask, do you agree that we should prioritize support for the american textile industry that are still here, particularly leaders in the nation in high-tech manufacturing and people who are producing problems -- products for our war fighters? sec. bessent: congressman, what i mean and meant was the survivors of this industry, they have done it through innovation and they will continue to innovate and they are high-end textile manufacturers.

i remember going to china in the 1990's and 2000 and seeing everything that had been outsourced there in the textile industry. those are the jobs you and i grew up with. many people, our family friends involved with. and i think that we, through good tariff policy, we can make sure that these existing businesses can grow and thrive, especially in the high-end. and again, anyone who has survived has done it through innovation, hard work. sec. bessent: that is what i told -- rep. timmons: that is what i told them, that we still support them and we are going to make sure they continue to thrive. so i want to turn to the automotive industry, specifically bmw which operates largest weight the world in spartanburg, south carolina. that facility has helped make our state the top auto exporter

in the u.s.. it employs either directly or through nearby supply network indirectly almost 80,000 of my constituents. almost one in 10 of them. automakers like the mw are continuing to invest heavily in u.s. manufacturing. incredibly they've invested an additional $4 billion in three years and that investment has real, lasting benefits for american workers, export and innovation. it is president trump's promise to the american people to renew the u.s. economy's competitiveness in the global economy and this is an effort long overdue. my question is this. as president trump renegotiate our trade relationships with the world, is it fair to say that the mw, that the type of investment that bmw has made, a generational investment is what we are hoping to incentivize? sec. bessent: yes, congressman. i regularly see that the port of charleston, the bmw x series sitting there for export and

then think that the president recently met with the heads of the three german auto companies and is working toward a solution for more american content and more made in the u.s.. there could be more jobs in your district. sec. bessent: that message was heard loud and clear and they are going to continue to invest in a very good partner. i'm just excited because interest rates coming down, regulatory relief, a more fair trade deal, we are going to be the best place to start to build a business and i appreciate your leadership in that regard. thank you, sir. i yield back. rep. steil:rep. steil: the gentleman who is the vice ranking member of the committee is recognized for five minutes. >> secretary besson's, i'm starting my seventh year in congress and in those seven years of never received more phone calls for my constituents on any issue than the hack into

the treasury payment system earlier this year. as you know well, this is the system that manages over $5 trillion a year in federal payments. paley's taxpayers, fisheries, embedded for an asset oversees an undercover and has their personal information and routing information. this is a purple district, people were nervous. we send a letter to your office asking 20 questions. your response that we just received was nonresponsive. i would like unanimous consent to enter those letters into the record. >> without objection. sec. bessent: rep. casten: rep. casten: i want to get through a lot of those questions right now and i would ask you to be as brief as you were in your response but i would very much like a more whole answer in writing. in january you pressured david leverett out of his role, after you refused to grant that access that elon musk had imposed. can you confirm the accuracy of those reports? sec. bessent: that's incorrect. rep. casten: you met with him on january 30, put him on administered of lead and left a

day later, is that accurate? sec. bessent: i did not put him on a meditative leave. i asked him, and that within 90 minutes -- rep. casten: so you are denying the new york times report. sec. bessent: i am adamantly saying that the new york times is inaccurate. rep. casten: all right, fine. sec. bessent: wait, and he subsequently resigned -- rep. casten: i'm just asking a yes or no question. if you want to be voluminous please write me a letter. was it your decision to terminate him or read pressured by others? sec. bessent: he resigned. rep. casten: who made the decision to put him on administered of leave? sec. bessent: he was not put on administrative leave. rep. casten: tom krause, are you a fan of him, who is now playing that role? you mentioned earlier he was in that role. do you agree that role includes duties that include managing treasury payment systems including overseeing elections for u.s. treasury bonds which

determine interest rates and ensuring the u.s. doesn't bridge the debt limit. we give agree that is all part of the function of that job? sec. bessent: no. rep. casten: no? shocking, ok. does mr. krause have any prior experience in government service. sec. bessent: he does not, neither do i. rep. casten: does he have any in the financial sector? which of course, you do. you can answer me. i'm doing this, you don't need the people behind you to help you. does mr. krause of any prior experience in the financial sector. sec. bessent: yes, he's put together -- rep. casten: no, did he work for a bank, hedge fund, private equity firm? sec. bessent: he worked for a private equity firm. rep. casten: he was the ceo of a software company. he is still the ceo of that software company, isn't he? sec. bessent: i'm not sure. rep. casten: he is. is it your view that the job he is holding as a part-time job? managing $5 trillion a year of distributions, that is a

part-time job or does that require full-time? sec. bessent: rep. casten: he is not managing $5 trillion a year in distributions. he is doing a tech upgrade. rep. casten: that is all he is doing, a tech upgrade? mr. leverett who said i'm not going to allow people to hack into the system, he was doing a tech upgrade? sec. bessent: he was in charge of 1.5 billion payments a year, which one third did not have -- rep. casten: sir, come on. we are going to move along. the chairman notably a moment ago did not swear you in so you are not under o3 right now. february 4 in your response to a seven democrat letter you said that mr. krause will only have read only access. a moment ago in response, you said and i quote "they were only granted read-only access at treasury." you are not under o3 right now. you could be, but you're not.

he testified underwrote in a recent hearing saying that mario was given access to the treasury payment system. the wish to correct your remarks to the chair ranking member? that no one was given the right access. sec. bessent: i never granted anything -- rep. casten: but mario was granted right access. sec. bessent: i never granted anything. rep. casten: mr. allows left the treasury department in part after it was discovered that he said normalize indian hate and i just want a eugenic immigration policy. do you agree with the sentiment? sec. bessent: i do not at all. rep. casten: should summon with the sentiments be employed in your department? sec. bessent: i had a conversation with the vice president -- i admired his grace. rep. casten: he then went to hhs. >> that gentleman's time has expired. the gentleman from indiana is now recognized. >> thank you mr. chairman.

mr. secretary, thank you for being here. frankly i apologize for the fact that you are getting a lot of accusations thrown at you and you haven't had much chance to respond to some of them. i know you have good answers. with respect to the individuals originally referenced by ranking member waters who may have had access to certain systems in response to mr. kasten, do you want to add any additional information on that matter? sec. bessent: i would say that that is in litigation and i access. rep. stutzman: thank. i just want to say thank you for your service and for your willingness to come serve in washington, d.c. at a critical time and the fact that you heeded president trump's call is refreshing, honestly. we see a lot of ups and downs. things happening around the world. here at home there is a reset

that is happening and that does create some volatility. but there's a lot of good news that i think the other side is missing, and i find it ironic that this chart was handed out earlier and of course it tries to show that all the blame is on the republican or presidents over the past century or so, but the one that really -- sec. bessent: if i may interrupt, as a former finance professor that chart would get an af. rep. stutzman: i agree. it's interesting that there is a big drop off right here after president into. i live in one of the heaviest manufacturing districts in the country, and i know that businesses don't turn on a dime that quickly if that was because of different trade policies. something happened during the president clinton era that caused a lot of jobs to leave. and that is what president trump and you are trying to fix, is that correct? sec. bessent: i think that thing was called nafta.

rep. stutzman: thank you for doing that because we saw jobs in northeast indiana in the auto industry. agriculture, manufacturing just continue to have a slow decline. manufacturing is critical to a nation and manufacturing has built america and we have seen jobs leave because of bad policy over the years. but because of president trump and because of you, we are now seeing headlines that say rolls-royce planning to shift production to the united date to avoid trump terrace. we see headlines saying johnson & johnson to invest over 55 billion dollars in u.s. in the next four years even in my district. gm has announced their increasing truck production. coming from a manufacturing family, we are seeing opportunities. is it going to happen overnight, absolutely not. but it is getting us the opportunity to look forward and say there is an opportunity because you all are resetting the table to look out for america first. i for you say this before.

that president trump has tasked you with reducing debt and deficits as well as keeping the economy strong. that is a huge task but one that has to happen and i appreciate what you've been doing because a debt crisis would just flat out limit us to any sort of recovery, it would be very difficult. i want to ask you really quick about the federal reserve dual mandate. generally speaking should the federal reserve focus more on fighting inflation or providing maximum employment and what should the fed focus on if the economy enters stagflation? sec. bessent: i would just comment on monetary policy in general rather than the federal reserve. i think the two are inextricably linked and as we saw during the terrible inflation during the biden years, that employment picked up. that was a slingshot effect as

we went into post-covid recovery. we are trying to end that. the federal reserve should focus on both and it at different times. keeping inflation down, president trump won because of, i believe, because real wages for working americans dropped. rep. stutzman: absolutely right and we saw the cost of living go up the last four years, the hardest on americans due to the former administration's policies. i know that there's a huge recovery and people are still trying to recover and they're hopeful and optimistic. my time is about to expire but i just wish you the best and they want to say thank you. working together here this committee, this plenty of places to work together.

>> we now recognize the gentleman from massachusetts for five minutes. >> thank you. sec. bessent, you for it from democrats publicly and i'm sure you've heard from republicans privately that this administration's reckless and chaotic tariff policy is wreaking havoc on our economy. rather than delivering stability for our country, this trump tariff tantrum has been inconsistent, counterproductive and is connected from reality. in my district in massachusetts, i'm hearing it from everyone. small business owners are reeling from the unpredictable on-again-off-again tariffs. they are holding back on expansion. delaying hiring. and bracing for the impact. local and state officials are telling me about the effect terrace will have on our state budget simultaneously

massachusetts will see energy bills increase while revenue from tourism will decrease. i want to focus on the outreach i received from everyday families who are just fighting to make ends meet. yes or no, mr. secretary, do you know what a car seat is? sec. bessent: i have two children, yes. rep. pressley: i figured as much. you and your husband have two children. so i'm sure you know that car seats are absolutely essential for families when traveling with babies and toddlers to school, to worship, to doctors appointments, everyday living. but not only are car seats essential, they are the law of the land. a lot of the land in 50 states. so there's no getting around that. mr. secretary, what is your estimate of how many babies are born in the united states each year? sec. bessent: i would guess

2,000,000-3,000,000. rep. pressley: while the number fluctuates, there have consistently been more than 3.5 million babies born in the united states. that means millions of families in this country are doing what? buying a car seat. because it is essential and it is the law of the land in all 50 states. but now that cost is going up. because trump has announced up to 145% tariffs on chinese imported products. approximately nine out of every 10 car seats in the u.s. come from china. that is a steep cost. steep cost hike for families all over the country. the price is up in republican districts and in democratic districts and it is not just the car seat impacted. we are talking about strollers, cribs, high chairs. no family is exempt from the harm of these trump tariffs on essential baby products. but don't just take my word for

it. i would like to enter into the record a yahoo! finance article for may 2025 entitled " first-year baby expenses already top $20,000 and tariffs are adding to the bill as china dominates key imports." rep. steil: without objection. rep. pressley: look, i support improving manufacturing in america that is not going to affect overnight like these tariffs are. there needs to be an exemption to help american families. trump has used his power for tariff exemptions on thermoplastics, semiconductors, but what about baby products? do you support an exemption to tariffs on items that parents need to care for their kids? yes or no? sec. bessent: whatyou are referring to -- rep. pressley: yes or no? i am reclaiming my time because i don't want you to filibuster and give me some macro economic answer. just give me a direct answer. sec. bessent: i'm going to agree

with you. rep. pressley: so yes, you do support an exemption on tariffs for products that are essential for families for babies. sec. bessent: exemptions on e-4 items. rep. pressley: i have to reclaim my time. mr. chair, i am reclaiming my time, give me my time back. i am reclaiming my time. i just want a simple yes or no. do you support an exemption to tariffs on items that parents need to care for their kids? because you are profamily. i cannot hear the words you say because i see the things that you do. every day. so clear it up. yes or no, do you support an exemption to tariffs on items that parents need to care for their babies? sec. bessent: it is under consideration. rep. pressley: good. i don't know what is stopping an exemption from going into effect today, so do it now. donald trump's america is not yesterday's price or today's price.

costs are going up, everyone is suffering especially families with young children. mr. secretary, i am making an appeal to you on behalf of the people of this country. please tell occupant trump to reports course and stop hurting america's families. i yield back. rep. steil: the gentlemen yields back. the gentleman from pennsylvania, the chair of our oversight and investigation subcommittee, recognized for five minutes. >> great to be with you. i sure wish we had colleagues that were upset about the biden 20% inflation and lack of wage growth along with that inflation and the high energy costs that were costing families throughout my district thousands of dollars. i wish we would have heard a people about that and yet we have just angry, angry voices over the potentiality of bringing manufacturing back to the united states that in fact

hasn't even gone into effect yet. it is nuts. the ongoing litigation response the democrats questions about the treasury doge team, is it true that they could find all the information, all the available information there? sec. bessent: yes sir. rep. meuser: also regarding the beneficial ownership rule which was a disaster for my small businesses, meet all of them, 100% complained about it, the original intent of the corporate transparency act was to root out bad actors. the previous administration however turned it into a massive data collection with over 50 questions. originally there were four, that outraged small-business business accountants, attorneys. anybody who had anything to do with it. only 20% of the small businesses were even able to comply by the january 1 deadline and meanwhile they were threatened with fines up to $500 per day and up to

$10,000, small businesses. they were beside themselves. you listen to the small businesses and did something immediately to correct course, exempting u.s. companies from reporting and my small businesses throughout my district applaud you for eliminating a needless bureaucratic reporting regime. so thank you. sec. bessent: i'm just sorry that so many of them had to waste their hard earned dollars either complying or preparing to comply. rep. meuser: and losing sleep and some even going out of business because they found it preposterous. thank you. let's talk about removing the ideological, subjective, even capricious regulators. under the biden administration, bank supervisors focused more on ideological concerns and less on material financial rules vs. risks. how would you work with bank regulators to refocus on rules

rather than issue unrelated to safety and sounds? sec. bessent: again, very important. the previous description, we had three of the largest bank failures in u.s. history. two weeks before that, the financial stability oversight council published a report that said that climate what the biggest threat to the financial system, not the thousand -- volatility, not overleveraged bond portfolios. so we are promoting common sense back to basics. rep. meuser: thank you, ok. the efforts related to the removal of reputational risk is the basis of supervisory criticism, can you comment on that? sec. bessent: yes sir. many individuals, many organizations were de-banked because of their political beliefs and regulators use that

as a litmus test. it is a very capricious category in bank regulation. so we have moved to remove that as a criteria. we believe that financial ratios are much more important than whether you are a democrat, republican or independent. rep. meuser: thank you, yes, well put. appreciate the fact that you see things that way. as they should be seen. capital requirements. all three and again, the g6 surcharge and other proposed capital rules might put u.s. banks at an international disadvantage. what do you believe, have you got an idea of the right level for capital requirements? sec. bessent: we are examining that now and we will weigh in heavily at the other rulemaking

entities. again, this one-size-fits-all, i believe one of the reasons we've seen stagnation in many other countries is the regulatory framework, the very tight regulatory framework around the regulated financial institutions. rep. meuser: thank you, i'm almost out of time. i will yield back, thank you very much. chair steil: the gentleman from new york, mr. taurus is recognized for five minutes. >> thank you mr. chair. during so-called liberation day, i'll trump imposed tariffs on territories not by humans, but by penguins. he imposed tariffs on countries with which the united states runs a trade surplus, not a deficit. he imposed tariffs on products that cannot be produced domestically which means a higher cost for american consumers without any benefit for american manufacturers. he imposed tariffs on impoverished nations like the

suit to which cannot afford to buy as much from us as we buy from them. if president joe biden had put in place these absurd tariffs, every single republican without exception would have condemned his trade policy as the height of incompetence. and you, mr. bessent, would have joined that chorus of criticism, there is no doubt in my mind. let's swap out biden's name for trumps, and suddenly the moral outrage from republicans vanishes like magic. i have a simple yes or no question. do you think excessive taxation undermines the competitiveness of american manufacturing? sec. bessent: yes sir. rep. torres: the trump tariff regime is a breeding ground for the excessive taxation of american manufacturing. consider as an example the intel manufacturing cpus. intel sources foreign components which are subject to the first layer of taxation, and manufactures the cpus in the united states before exporting to china, which will face second

taxation. and finally, china will export it back to the united states where it will face a third layer of taxation. taxation upon taxation upon taxation of american manufacturing goods. do you think that kind of compounding taxation of american manufacturing goods like intel cpu will strengthen or weaken american manufacturing? sec. bessent: you are saying that taxes raise cost? rep. torres: i'm sorry? sec. bessent: you're saying that taxes raise cost? rep. torres: taxing the goods they come into it manufacturing product raise goods, yes. sec. bessent: where same taxes are inflationary. rep. torres: yes. in the context of tariffs, yes. sec. bessent: then we should cut taxes. rep. torres: can you answer my question? sec. bessent: i'm not sure i understand. rep. torres: intel would face three levels -- i'm sorry, intel

cpu with a three levels of taxation, the taxes on the foreign components, the u.s. taxes, and the chinese tariffs. do you think that that count of compounded taxation hinders or helps american manufacturing? sec. bessent: i think the strategic american manufacturer is very important and it think we have to bring that back to the u.s.. rep. torres: do you think taxing intermediate goods that go inside american manufacturing products helps or hinders manufacturing? sec. bessent: i believe that as the example you give, we have to bring these strategic industries back to the u.s. rep. torres: a boeing aircraft has 6 million components. there is no universe in which we are going to manufacture all 6 million components in the united states. and so if you impose a tax on those foreign components, you are hindering the manufacturing here in the united states.

do not acknowledge that? sec. bessent: i acknowledge that the supply chains are wide, but we've also, for the automakers, we've given an exemption. chair steil:chair steil: let me move on. critical minerals are essential to the defense of the united states. china controls almost all of the rare earth mining and almost all of the critter rope -- creek a mineral processing. trump administration has chosen to wage a total trade war with china without first building a critical mineral supply chain here at home. just like it would be fullest to enter a car race without enough fuel in the tank. or enter a weightlifting competition without sufficient strength to lift the weights. it seems equally foolish to wage an all-out trade war on china without a domestic critical mineral supply chain. breaking china's strongest chokehold over the united states, the ccp chokehold on

critical minerals and rare earth elements is a precondition for winning the trade war against china, do you agree? sec. bessent: i believe that we have to bring the rare earth, as you correctly said, processing back -- for not even back to the u.s.. rep. torres: not only processing but mining as well. critical mineral processing and refining. and the weaponization of credit on minerals against the united states is the opposite of making america safe again. sec. bessent: the rarest or not that rare, the processing is rare. rep. torres: we have an insufficient mining industry in the united states and you know that. sec. bessent: i hope you'll join us in the deregulation of many of these owners mining requirements. rep. torres: i think my time is expired. chair steil: the gentleman from california is recognized for five minutes. >> thank you for holding the searing. good to see you and thank you so much for coming.

southern california, where i'm from and the district that i represent serves as the primary gateway to pacific rim and asian goods into the united states come through the ports of l.a. and long beach, but we are already starting to see a drop in volume as the ports of l.a. and long beach are expected cc 35%-30% drop. cargo volume is one of the largest economic drivers in the region and a drop of just impact families at the grocery stores and small businesses bottom line, but also result in dockworkers losing their jobs. secretary besson, i would like to ask how can you ensure that our tariff policy will not unintentionally harm american small businesses and workers in the long-term? sec. bessent: congresswoman, we

believe over the long term that it will drive growth in the economy and as i've said many times, it is a mistake to look at trade in isolation. the trump economic policy is a three legged stool. trade, taxes and deregulation, and we believe that the sum of the parts, that the whole is greater than the parts. and as we complete each one of those, the u.s. was a substantial economic growth. rep. kim: thank you. a lot of my constituents share these concerns that we raised, so i'd like to continue this discussion on this specific topic with you moving forward because i'm concerned that these long scale tariffs, if they continue in the long-term, that american working families and small businesses will suffer under price hikes and a lack of certainty. but i want to shift years and

discuss the financial stability oversight council. under the previous administration. secretary yellen rescinded the nonbank systematically important financial institution, and replaced it with a new framework for assessing financial risk. this new framework overlooks the importance of prioritizing activity-based standard in a cost-benefit analysis. so does fsoc intend to be a 2023 guidance so that it is more closely aligned with the thoughtful process that was created in 2019? sec. bessent: congresswoman, that is on our agenda. rep. kim: thank you. and as you finalize that decision i want to emphasize that my support for a return to an activity-based entry that more appropriately address the risk -- sec. bessent: treasury would be happy to work with your team on that. rep. kim: finally i would like

to urge you to continue your support for cdf i. cdf i funded programs are statutory, as you know, and it has been critical in promoting the local economy in orange county. so do you still agree that the cdf i fund has a critical role to play in fostering economic opportunity? i think i know the answer because you stated very clearly in public statements. sec. bessent: we believe that if cdfi's follow their statutory obligations and do not digress into more ideological boundaries that they can be important institutions. rep. kim: thank you. last week i attended the financial literacy roundtable and thank you so much for inviting me. sec. bessent: i think i just missed you. rep. kim: your team is very well-represented and again, thank you so much because as a

cochair of the financial literacy and wealth creation caucus, events like that bringing the stakeholders together and having a meaningful dialogue in conversation i think is critically important, and we need to continue that. so can you talk about how you can continue to advance financial literacy initiatives now that we are past the financial literacy month? i was able to take the leadership and pass the bill that proclaims the month of april at the financial literacy month, and i hope that we can continue to work in this space together. sec. bessent: as you should know, it is a strong, poor belief of mine that financial literacy is the only path to economic independence and well-being. so the more americans who can be educated, and i think we should probably go state to state and encourage each state to put in financial literacy standards for their students. chair steil: the gentlewoman's

time has expired. the gentlewoman from texas is recognized for five minutes. rep. garcia: i want to start first by just clarifying your testimony and its delivery. why did you ask for your witness statement to the embargoed until this morning? sec. bessent: pardon me? rep. garcia: your testimony reads at the very top embargoed until delivery, which means that we didn't follow the usual practice of this committee of getting the testimony 24 hours in advance so that committee members can review it and prepare for questions. yours was posted at 10:01. the committee was at 10:00. sec. bessent: my staff is just telling me that it is standard practice. rep. garcia: it is your standard practice? it is not our standard practice. as a committee.

sec. bessent: i was told it was standard practice. rep. garcia: you were told by whom, sir? sec. bessent: 19 and legislative affairs team working with the committee. rep. garcia: for the record, think you should clarify to the gentle man that that is not our standard and i know that at least i didn't know anything about this until i got here, and i don't think our committee staff on the democratic side was even notified that we would be getting all your testimony late. i just wondered why you had made that request and clearly at the top sec. bessent: it was mostly meant for the press. >> we are not press, sir. we are the members of congress that have oversight. mr. chairman, i would hope that you would not condone this kind of late submission. it just doesn't help. frankly for some of the atmosphere that it's created

when we all sit down and don't have your testimony, well, then we just sort of don't feel really good about that it's not our practice. sec. bessent: i appreciate the importance you put on my statement. >> thank you. notice is important, sir. you know what the poverty rate is in our country? sec. bessent: i believe that the poverty level is a fixed number. >> do you know the poverty rate in this country? sec. bessent: i believe it is in the teens. >> the teens, ok. well, it's the lower 11%. it strikes me that most of your testimony is about the tax cuts and cutting costs and it's always about tax cuts and it's always about the rich. nothing is ever said about the poor other than you suggesting that you worked yourself through college. sec. bessent: no tax on tips, no tax on social security. no tax on overtime. >> i read your testimony.

it's not anywhere in here. that is not in here. sec. bessent: deductibility -- >> i am referring to your testimony. i said right up front i can see you and i can hear you. you've not said one thing about what we are doing to help the poor. in fact, even when we were talking about the car seats, that impacts poor people more than anyone else because not only can they usually not even afford a car seat and have to go to a garage sale to find one, now it's going to be even higher. your president is suggesting that he wants to give a $5,000 bonus to women to have babies and then what? just leave them out in the cold alone? no car seat, no food? no medicaid? no chip program? i am asking you right now -- sec. bessent: the worse thing for working families will be the expiration of the tax cuts.

>> it's not just about the g.d.p. it's not -- it's also about making sure that we keep the poverty rate in this country low. there are people who are living in poverty that never have lived in poverty before. you also failed to say here -- you say unemployment remains low. it should have read unemployment went up. sec. bessent: ma'am -- >> it did. sec. bessent: under the biden administration -- >> bewe are not talking about biden. we are talking about your testimony today about the current president and his plans because i can tell you, i am from houston. i am concerned too about some of the tariffs on energy. you know, we have done a lot to increase trade in houston, construction, everything after the pandemic. all things were growing. but now that the trump tariffs have surfaced, it is threatening houston's economy. i represent the area where

almost the entire ship channel is in. the petrochemical companies are in my district. the port is in my district. everybody is trying to figure out -- >> the gentlewoman's time has expired. >> mr. chairman, i ask unanimous consent to enter into the record the opinions and order by the united states district court in the southern district of new york in the matter of new york versus donald trump that directly contradicts several responses the secretary gave to me about doge's access to treasury payment systems. >> without objection. i want to thank our witness today. we appreciate secretary bessent's testimony. without objection, all members will have five legislative days to submit additional written questions for the witness to the chair. the questions will be forwarded to our witness for his response. secretary bessent, please respond no later than june 2, 2025. this hearing is adjourned. [captions copyright national

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